29-703. Interim distributions

(Rpld. 9/1/20)

A. Except as provided in this chapter, a limited liability company shall make distributions of cash or other property to its members before the dissolution and winding up of the limited liability company to the extent and at the times or on the occurrence of the events specified in an operating agreement, or if an operating agreement does not so specify, pursuant to section 29-681, subsection D, paragraph 2.

B. Distributions of cash or other property to members by a limited liability company before the dissolution and winding up of a limited liability company shall be shared among the members and among classes of members in the manner provided in an operating agreement. If an operating agreement does not so provide, distributions shall be shared among the members in the following order:

1. Distributions shall be shared among the members in proportion to the amount of cash capital contributions and the value of other capital contributions, as determined under subsection C of this section, made by them and not returned until each member has been repaid his capital contributions.

2. Other distributions shall be shared by the members equally.

C. For purposes of subsection B of this section, a capital contribution other than a cash contribution has the value determined in the manner prescribed in an operating agreement. If an operating agreement does not specify the value of any such capital contribution and does not prescribe a manner for determining its value:

1. The value of a capital contribution of services is the fair market value of the services at the time they are rendered.

2. The value of a capital contribution of property other than cash is the fair market value of the property at the time of its transfer to the limited liability company.

3. The value of a capital contribution of the use of property is the fair market value of the use of the property during the period that the limited liability company enjoyed possession or use of the property.

4. The value of any other capital contribution other than cash is deemed to be zero.